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NHDOT chief warns of cuts, says gas tax needed

By DAVE SOLOMONNew Hampshire Union Leader

CONCORD — Transportation Commissioner Chris Clement commended DOT workers as a snowstorm raged outside the hearing room in Concord on Tuesday, but warned lawmakers that he could have to lay off 700 of those workers if the Legislature fails to approve an increase in the state's gasoline tax or a new casino.

As several one-time sources of revenue for the state's highway fund evaporate, Clement told members of the Senate Ways and Means Committee that his agency is facing shortfalls of $48 million and $105 million over the next two budget cycles if the Legislature does nothing to increase DOT funding.

"We need help," he said.

Committee Chairman Sen. Bob Odell, R-Lempster, tried to keep the conversation focused on a proposal by fellow committee member Sen. James Rausch, R-Derry, to increase the state's 18-cent gas tax by 4.2 cents a gallon, but the conversation kept turning to gaming as an alternate revenue source.

"We need both," said Clement, warning of continued deterioration of the state's roads and bridges, failure to widen I-93, and a budget shortfall that could cost him almost half of the 1,600 employees who work for his department

Cost of gas tax

Opponents of Rausch's bill, SB 367, warned that it would do serious harm to the state's transportation and forestry industries, with cost being passed along to consumers.

"Those sponsoring the bill say it will only increase the cost $16 per passenger vehicle per year, based on 25 miles per gallon, traveling 10,000 miles per year," said tree farmer Tom Thomson of Orford, honorary chairman of the state chapter of Americans for Prosperity. "What they don't tell you is how this tax will have a devastating impact on the trucking industry."

In written testimony, he accused Clement of politicizing his position: "It appears that Commissioner Clement has decided to become the DOT's top lobbyist, and take his Power Point presentation to every corner of the state, claiming his agency is short of revenue by $70 to $100 million; while threatening to lay off 300 to 700 DOT employees if he does not get additional revenues through an increase in the gas and diesel tax."

Thomson warned that truckers are running on razor-thin margins and any increase will put some out of business.

"The others will just pass the increase onto the consumers," he said. "Stop and think about it. Everything we consume moves by diesel. Raising the tax makes the price of everything, including food, higher due to any increase in the diesel tax."

Rausch called on the trucking industry to do its share to maintain the roads in a state that has been far more generous to the industry than its neighbors. He pointed out that New Hampshire has a lower gas tax, higher weight limits and lower fines for violations than any of its neighboring states.

"We give them breaks, and what do we get in return?" he asked.

Under Rausch's proposal, the state's gas tax, which has not been increased since 1991, would increase about 4.2 cents a gallon and produce about $30 million in new revenue for transportation projects. A formula using the Consumer Price Index would be reapplied every four years to adjust the gas tax to align with inflation.

Growth in DOT budget

Senate President Chuck Morse, also a committee member, pressed Clement on the growth in his budget in recent years, saying it had gone up 20 percent a year over five years at a rate that simply was "not sustainable."

Clement admitted that DOT spending had gone up more than $100 million since 2007, but said most of that was due to infusions of cash through the federal stimulus program and other one-time events. Even though the DOT spends about $700 million, most of that is pass-through of federal highway funds. The amount of discretionary funds used to finance payroll and other department operations is only about $142 million, Clement said.

He said gas tax revenue has been declining due to the recession and improvements in fuel efficiency, while the state now has 140 red listed bridges, 37 percent of its road are in poor condition, and the expansion of Interstate 93 is underfunded by $250 million.

"We are in the midst of an infrastructure crisis," he said.

Efforts to raise the gas tax, or road toll as it is known, failed in 2009 and again in 2013 largely because of Republican opposition.

This year, Rausch's bill has two Senate Republican co-sponsors, Sen. Nancy Stiles of Hampton and Sen. David Boutin of Hookset, along with House Republican John Cebrowski of Bedford.dsolomon@unionleader.com